Sony's press release for the PS3 makes interesting reading, especially for the cheaper one (if $499 can be described as cheap). It lacks digital video out, so I'm not sure how they can do 1080p at all (how many TVs can take 1080p over component video? None that I have ever seen). There is also no HDMI/HDCP of course, which means that if any Blu-Ray titles set the ICT flag then the output won't be HD, it will be down-rezzed. If any set the no-analog flag then you won't see any output at all.
I recall the original claim was that the PS3 would have two HDMI outputs, and in fact it has either one, or zero. That's quite a difference.
Wi-fi support is another feature missing from the "cheaper" one - bit of a bummer for PSP owners I should think.
I'm done gloating I guess. To bring me down to earth, I just have to look at the Sony stock price vs the Microsoft stock price for the last year, but I'll try not to.